IBM Indias sales figures dont explain CEO Sam Palmisanos apparent excitement about the country. Theres high growth, but India is still a tiny market for IBM, bringing in less than 1% of its global revenue. That is less than half of what it gets from China, or even Brazil.

Yet, IBMs India euphoria is for real. At stake is the countrys vast talent pool. HR figures are hence a better indication of what the company is up to in India. Last calendar year, IBM added 14,500 employees in India, taking its total manpower to 55,000one-sixth of its global workforce. Within Indian IT, it is next only to the Big Three services firms. That kind of resource-building explains the $6 bn investment plan that Palmisano announced in June last year.

That does not mean that Indias domestic market growth is of less importance. FY 07 saw IBM India revenue growing by 35%better than in most major emerging markets, including other BRIC markets. And that came with an all-round growth across sectors. While 50% growth in telecom revenuesthanks to the huge Bharti outsourcing deal struck a few years earlier and a new deal with Idea cellularwas the main driver, financial services too saw 35% growth. But the better story was in SMB, where IBM grew about 35%. Government was the other major growth segment. Overall, growth slowed down a bit in the last quarter.

FY 07 was also a year in which IBM saw its services business grow at a healthy rate. The other major outsourcing deals of the year were those with Fino and DLF. Though nowhere yet near the global share, IBM Indias services business, with close to 37% of total business, has come into its own. DQ

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